Rusty or not, Indiana ranks among top 5 for growth in industrial jobs

A column by Craig Ladwig

Thursday, September 19, 2013 - 12:01 am

In the 1990s at the morning coffee shop I would run into a former mayor of my city, now retired. He was from the beginning a successful businessman and gifted politician, albeit a Democrat. This is to thank him for his wisdom and prescience.

One morning the mayor let down his guard to make two observations — bons mots thrown to a young conservative friend, perhaps. Both have stayed with me. Indiana needs to learn to be itself, the mayor said in so many words that morning long ago. He had tried it the other way. For when a large manufacturing plant closed in our city in the 1980s, he was one of the first municipal executives to step away from traditional manufacturing and go after high-tech businesses.

That was a mistake, he had decided. He now hoped Indiana would capitalize on an inherent strength — the skilled machinists and innovative engineers who grow out of Hoosier soil like corn.

There always will be a market for finely made machinery of one type or another; we could become the little Austria of North America, to paraphrase his argument. The premier machinists of the world are already here.

In the years after its derogation as part of the “Rust Bowl” Indiana developed an inferiority complex. We became resigned to experts telling us we needed to be like someone else, in any other somewhere else.

We now read that our largest state colleges are increasing the percentage of out-of-state and even out-of-country applicants accepted. And the mayor of Indianapolis recently proclaimed, absurdly, that when people around the world think of cricket, “I want them to think of Indianapolis.”

Such is the thinking behind “Rust Belt Chic,” to use the urbanist’s term of art. Happily, it is being rejected. A counter argument, my mayor’s argument, is taking hold.

Joel Kotkin, writing in this month’s Forbes magazine, notes that Indiana, Michigan, Ohio and Wisconsin, rusty or not, have ranked among the top five states for growth in industrial jobs since 2007. Moreover, these states of the Great Lakes have added a half million new manufacturing jobs since 2009. Here is Kotkin explaining the potential:

“To build on this progress the region needs to focus on its human assets. This starts with by far the nation’s largest concentration of engineers, some 318,000, which stems from the oft-unappreciated fact that manufacturing employs the majority of scientists and engineers in the nation. It also accounts for almost 70 percent of corporate research and development. This includes disciplines such as mechanical engineering, which according to a recent study, has enjoyed steady job and income growth over the past 20 years.”

He notes that neighboring Ohio has already begun rebuilding its skilled trades, educating its workforce with training for jobs that actually exist and are expected to grow. (Indiana Gov. Mike Pence, who is learning to ride that symbol of American manufacturing skill, the Harley-Davidson motorcycle, has given indication that he will follow.)

Kotkin concedes that traditional manufacturing jobs may never return in large numbers. The earnings level for skilled workers, however, remains above the national average. That may increase as shortages develop, Kotkin believes. Indiana could capture a good part of it.

The obsession with high-tech fancy, he reminds us, goes back at least a decade. Its height was during the two terms (2003-2011) of the politically fashionable governor of Michigan, Jennifer Granholm. Her idea was to turn Detroit into a “cool” burg. She went on to help Barack Obama design his economic strategy.

Kotkin’s alternative advice to subsequent economic-development wizards boils down to this, a phrase my pastor uses in his homilies: “Don’t ask God to bless what you are doing, do what God is blessing.” As bad examples, the pastor might have employed the various plans to bless politically selected investors with build-them-and-they-will-come stadiums, hotels, convention centers and other multimillion-dollar subsidies, all illustrations that Kotkin discourages:

“To be sure, these can succeed in building a hipstercordon sanitaire — a miniaturized but utterly derivative urban district — that can be shown to investors and visiting, and usually core-centric, journalists. It also can enrich speculators and those politicians who service them, but represents a marginally effective means of reviving a city, much less the regional, economy.”

But what about that second observation — the one from that coffee meeting with the ex-mayor? A lifetime in politics had convinced him that political leadership in Indiana could not “take the heat.” By that I believe he meant our elected officials would not put forward sound policies if it risked their position. The mayor thought the problem for both parties was office-holders who, when opposition emerged, trimmed the most critical programs to fit their political ambition. It was a matter of professional pride, perhaps. He sincerely believed that his worth as a politician was his ability to convince the electorate of the correct policy regardless of personal fortune.